Thrift Savings Plan

The Thrift Savings Plan (TSP) Think 401k, designed to aid in the retirement savings process.

Think about the kind of life you expect to have in retirement, how long you expect to be in retirement, and what your income needs might be.

  1. Start by estimating a percentage of your current annual income that you think might sustain you in your retirement years.
  2. Then determine the extent to which you expect to rely on your TSP account for that income.

Your TSP account may be your main income source or it may be one of several sources that could include a pension, an annuity, an IRA, your Social Security payments, or other savings. You should consider all of your income sources when determining what role your TSP account will have in meeting your retirement needs.

GPIS Benefit Specialist can help you!

  • Decide which funds are best for you.
  • Show you how to have a lifetime income with your TSP funds.
  • We can also help you understand all your options. Not only can we educate you on your TSP options, we are licensed professionals that can show you detailed options that best fit your needs.
  • We help you protect your heirs.
  • Assist employees in rolling over their TSP into guaranteed options where there is absolute safety with great opportunity’s and NO  risk of loss.

TSP Rollovers

You can rollover your TSP funds into a Traditional Fixed IRA or Annuity, which offers you several advantages:

  • Security: You can create an income stream that will last your lifetime.
  • Flexibility: You can establish a number of interest generating strategies and income and withdrawal options.
  • Guarantees: By setting up an annuity, you can preserve your principal even in a down market.
  • Growth Potential: You can continue to grow tax-deferred income.
  • Income: You can establish income options that include lifetime withdrawals, immediate access or a combination of both.

TSP Withdrawals

You may make three types of withdrawals from your TSP: In-Service withdrawals, Age-Based withdrawals and withdrawals upon Separation or Retirement.

 In-Service Withdrawals:

  • Can only be made by participants who are still employed by the Federal Government.
  • Can only be made for two purposes:
  • Age-based in-service withdrawals for participants who are older than 59 ½
  • Financial hardship in-service withdrawal for participants who can document hardship
  • Cannot be repaid. Once you have made an in-service withdrawal, you cannot return or repay the money; your account balance is permanently reduced.

Age-Based Withdrawals:

You can make an age-based in-service withdrawal anytime after you reach age 59½ as long as you are actively employed in Federal service.

The following conditions govern age-based withdrawals:

  • You can only withdraw funds in which you are vested.
  • Your withdrawal must be at least $1,000 or the entire amount of your account balance if it is less than $1,000.
  • You may make only one age-based withdrawal while you are actively employed in Federal service.
  • If you make an age-based withdrawal, you will not be eligible for a partial withdrawal after separation from Federal service.

TSP Loans

The TSP Loan Program offers two types of loans:

 General Purpose Loans

  • May be used for any purpose according to plan guidelines
  • Do not require any documentation
  • Require repayment in five (5) years
  • May cover financial hardship situations

Residential Loans

  • May only be used for the purchase or construction of a primary residence, which includes the following:
  • House
  • Townhouse
  • Condominium
  • Shares in a cooperative housing corporation
  • Boat
  • Mobile home
  • Recreational vehicle
  • Require documentation
  • Require repayment in 10 to 15 years

Note: You may have one general loan and one residential loan from your TSP account at any one time.

You are eligible for a TSP loan, if you meet the following criteria:

  • You are a current employee in a pay status.
  • You must have at least $1,000 in employee contributions and associated earnings in your TSP.
  • The balance of your paycheck after the loan payment and other deductions must equal at least 10% of your basic pay.
  • There is no court order against your TSP.
  • FERS employees must obtain spousal consent.

Contribution Limits

Don’t miss out on matching contributions.

If you are a FERS employee and your contributions reach the IRS elective deferral limit before the last pay date of the year, you will not receive all of the matching contributions to which you would otherwise be entitled. Use the calculator, How much can I contribute? to ensure that you don’t leave any money on the table.

The Internal Revenue Code (I.R.C.) places limits on the dollar amount of contributions you can make to the TSP. The Internal Revenue Service (IRS) calculates them every year and they can change annually. The TSP announces the limits on the TSP website and the ThriftLine as well as through its various publications when the limits become available.

Contribution Limits for 2018
Elective Deferral Limit $18,500 IRC §402(g) Applies to combined total of traditional and Roth contributions. For members of the uniformed services, it includes all traditional and Roth contributions from taxable basic payincentive payspecial pay, and bonus pay, but does not apply to traditional contributions made from tax-exempt pay earned in a combat zone.
Annual Addition Limit $55,000 IRC §415(c) An additional limit imposed on the total amount of all contributions made on behalf of an employee in a calendar year. This limit is per employer and includes employee contributions (tax-deferred, after-tax, and tax-exempt), Agency/Service Automatic (1%) Contributions, and Matching Contributions. For 415(c) purposes, working for multiple Federal agencies or services in the same year is considered having one employer.
Catch-up Contribution Limit $6,000 IRC §414(v) The maximum amount of catch-up contributionsthat can be contributed in a given year by participants age 50 and older. It is separate from the elective deferral and annual addition limit imposed on regular employee contributions.

If you are a member of the uniformed services, you should know that Roth contributions are subject to the elective deferral limit ($18,500 for 2018) even if they are contributed from tax-exempt pay. If you want to contribute tax-exempt pay toward the annual additions limit, you will have to elect traditional contributions for any amount over the elective deferral limit.

In addition, if you are eligible to make catch-up contributions and you are deployed to a designated combat zone, you will not be able to make any traditional catch-up contributions from your tax-exempt pay. However, Roth catch-up contributions from tax-exempt pay are allowed.

If you are a member of the Ready Reserve and you are contributing to both a uniformed services and a civilian TSP account the elective deferral and catch-up contribution limits apply to the total amount of employee contributions you make in a calendar year to both accounts.

If you are called to active duty and make tax-exempt contributions to the TSP while deployed in a designated combat zone, the sum of the employee and agency contributions to your civilian account as well as the tax-exempt contributions made to your uniformed services account cannot exceed the annual addition limit.